New valuation system adds to rural tax burden

Rates and land tax are set to rise if the State government's proposed amendments to the Valuation of Land Act are passed.

Landowners’ rights in relation to unimproved valuations are also set to be eroded in the sweeping changes, which the Bligh government says are necessary to bring equity to the land valuation system.

The Government’s intention is to to overturn the consequences of a 2009 court case involving Pacific Fair Shopping Centre but the unintentional consequences for rural landholders may be severe.

St George solicitor Michael Cowley, of Fox &Thomas, believes the effect of the amendments will be to greatly increase the unimproved value of many parcels of land.

“These changes will lead to rising costs for many landholders,” Mr Cowley said.

“Landlords will have to pass on these costs to their tenants. That has to affect property values in the long term”.

Mr Cowley predicts an upswing in challenges to valuations, as well as confusion about what constitutes improved land.

The major changes being proposed to the bill include amending and widening the definition of unimproved value, changing the objections and appeals process and making the amendments retrospective to 30 June 2002.

“The complexity of the valuation process will put pressure on rural landholders by adding to their costs,” he said.

“With the introduction of so many new components into the unimproved value, the land's unimproved value will no longer be reflective of the value of similar land in the same district or area”.

The existing Act has been in place since 1944. The proposed changes are the most significant in its history.

Landowners with concerns or questions should contact their nearest Fox and Thomas office.